News

Commission approves Sony/EMI music publishing deal 10.12.18

On October 26 the European Commission gave unconditional clearance to Sony’s acquisition of sole control over EMI Music Publishing (“EMI MP”). The transaction combines the recorded music activities of Sony, the music publishing activities of its subsidiary Sony/ATV, and the music publishing activities of EMI MP.

Independent music companies association IMPALA raised concerns with the transaction, claiming that Sony would enjoy excessive bargaining power post-transaction. As in previous transactions in music recording and publishing, the Commission’s competitive analysis focused on the scope for the parties to use a strategy of rights withdrawal to exercise bargaining power in negotiating online rights with digital service providers such as Spotify and iTunes. The parties demonstrated that there was no credible basis for this hypothesis for a number of reasons, including pre- and post-transaction corporate governance arrangements for EMI MP, and the scope for authors to switch between music publishers in response to any withdrawal of rights. The parties also extended previous “control share” analyses undertaken by the Commission, using more comprehensive data than previously available to demonstrate that the parties’ position within the European market for rights licensing would not give rise to bargaining power concerns.

RBB worked with Cleary Gottlieb Steen & Hamilton, counsel to Sony, throughout the notification.

Permalink

Pharma merger cleared unconditionally by the European Commission 07.12.18

Pharma merger cleared unconditionally by the European Commission

On 05 December the European Commission cleared the acquisition of Recordati by CVC, owner of several portfolio companies active in the pharmaceutical sector, including Doc Generici and Alvogen. The transaction was cleared in Phase I without remedies being required. The European Commission focused the analysis on specific markets in Iceland, Italy and Romania, where the transaction created overlaps.

The European Commission found that the transaction would not raise concerns because the merging parties were not close competitors, despite the fact that the merged entity had significant combined market shares in some of these markets. In particular, in these markets, one of the parties supplied a branded originator medicine, while the other party supplied a generic version of the drug. Given the specific features of prescription and reimbursement practices in these markets, the European Commission considered that generic and originator products did not compete closely with each other and that the remaining generic suppliers would continue imposing a strong competitive constraint on the merged entity.

RBB Economics assisted CVC, alongside Clifford Chance.

Permalink

Public Interest in Merger Control – An Elevated Standard or a Subjective Wish List? ABA Teleconference 06.12.18

The Antitrust Section of the American Bar Association (ABA) has organised a teleconference on Public Interest considerations in merger control on Thursday, December 6, 2018. This teleconference will provide a review of public interest issues in merger control in various jurisdictions around the world, and discuss recent developments in this field. RBB Partner Patrick Smith will discuss the increased focus on public interest considerations in merger reviews, and in particular the differences in approaches, and focal areas, in developed and emerging economies. The conference addresses a topic of enormous practical significance, in light of increasing efforts in multiple jurisdictions—including the US and Europe—to strengthen governmental review of transactions on national security and other public interest grounds.

Permalink

RBB holds the eighth annual RBB Economics Sydney conference 01.12.18

ACCC Chair Rod Sims addressed the eighth annual RBB Economics Conference in Sydney and spoke of the economic foundations of competition law, including the history of competition law, recent challenges to the consumer welfare standard, and the hipster antitrust movement. Caroline Coops, from King & Wood Mallesons, spoke alongside Rod about the current state of competition law in Australia from a private practitioner’s perspective.

Other speakers included Jane Lin from the ACCC, Dave Poddar from Clifford Chance, Patrick Gay from Herbert Smith Freehills, Robert Walker from Allens, Paula Gilardoni from Gilbert + Tobin, and Sarah Keene from Russell McVeagh in New Zealand. RBB’s Simon Bishop, George Siolis, Yan Yu and Chris Whelan also spoke at the conference.

Rod and Caroline’s speeches can be found [here] and [here].

Permalink

4-to-3 telecom merger cleared unconditionally by the European Commission 29.11.18

On 27 November the European Commission cleared the acquisition of Tele2 Netherlands by Deutsche Telekom, the owner of T-Mobile Netherlands, after an in-depth Phase II investigation without remedies being required. This transaction reduces the number of mobile network operators in the Netherlands from 4 to 3. In its press release the Commission indicates that important reasons for its unconditional approval are (1) the relatively small combined market share of the merging parties, (2) the limited market share of Tele2 NL and (3) uncertainty as regards Tele2 NL’s future in the Dutch market, in the absence of the transaction.

The case is noteworthy for several reasons. First, it signals that there is no “magic number”, and that 4-3 mergers can be approved in the telecom sector, depending on the specificities of the case. Second, the Commission cleared the transaction unconditionally, even though it had issued a Statement of Objections against the transaction in the course of its Phase II investigation. Third, and most importantly, it shows the importance of counterfactual assessments in the context of merger control. The assessment of the likely future role of Tele2 NL in the Dutch market in the absence of the transaction was a crucial element in the Commission’s decision to clear the transaction unconditionally

RBB Economics assisted Tele2 throughout the procedure, alongside Clifford Chance.

Permalink